Sharechat Logo

Oceania Natural third-quarter sales growth stalls on unstable grey market

Tuesday 31st January 2017

Text too small?

Oceania Natural's third-quarter revenue stalled earlier growth as an unstable grey market in China prompted the honey and noni juice products maker to rethink its distribution into the world's most populous nation.

Total revenue was $327,000 in the three months ended Dec. 31, compared to $1 million in the second quarter, the Auckland-based company said in its key operating metrics. The NXT-listed company last week scaled back its 2017 forecast as discounted rival honey products undermined its sales into China through grey markets, and forced it to focus on direct distribution channels. 

Oceania Natural said sales were weighed on by the uncertainty over the definition of genuine manuka honey and an upcoming science report will be watched by the industry and consumers alike, while changing Chinese regulations and the rise of counterfeit manuka online meant it had to rely on slower distribution through direct channels. 

Last week the company lowered its revenue target to $2.2 million for the year ending March 31 from $5.4 million. Sales into China via distributors are expected to be $605,000, down from a previous forecast of $4 million, while Oceania's direct sales are projected to be $1.6 million, up from $1.4 million. The forecasts make up Oceania's key operating milestones (KOM) used on the NXT market instead of continuous disclosure requirements.

Today's third-quarter metrics show direct sales accounted for $138,000 of revenue in the period, while distributor sales totalled $189,000. Gross margin was 38 percent in the period. 

Oceania last traded at $1.94, down from $2.16 when it lowered its forecasts last week. 

 

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares up, led by Fisher & Paykel Healthcare, Ryman
NZ dollar heads for 0.1% weekly fall with jittery markets over weaker yuan
Xero quits developing in-house US payroll product, signs up with Gusto
Farming, horticultural groups seek flexibility in zero emissions plans
Hawaiki Submarine Cable begins commercial operations
Net migration falls in June, remains historically high, Stats NZ says
Commerce Commission files proceedings against Wilson Parking, seeks penalty
SeaDragon's funding transaction unfair but positives outweigh negatives, say independent advisers
Morningstar cuts earnings forecast for Z Energy but maintains hold rating
July 20th Morning Report

IRG See IRG research reports